This is a summary of the presentation given by Alan Long, from Experian Hitwise at SMX Melbourne last month, about how to make conversion optimization work for your business.
Survey of Australian Marketers
Conversion optimization is basically like product placement in a store, says Alan. In retail stores, you switch your products around, change signage etc. to see where/how they are best placed to produce the most sales. This is what Conversion Optimization is all about, but using your web site content.
Experian researched 300 Australian marketing professionals from multiple industries about conversion optimization via an independently commissioned study. The idea was to explore how Australian organizations are using online marketing channels and assess their understanding of conversion optimization.
The study showed that 2.043 billion was spent in Australia on online marketing to the end of June 2010. That’s a 13 percent increase over last year. Aussie marketers are pumping more budget into online marketing to drive higher volumes of traffic.
Are marketers missing a trick when it comes to boosting web ROI? Yes, Alan says. Lots of money being spent, but very little of that is put into converting visitors into customers or measuring success.
At the moment, site visitors are the main measure of web site success for many marketers. However, conversion is a more a valid measure of success, with conversion rates typically running at 1-5 percent. The trend in Australia is towards boosting traffic rather than reviewing site performance to drive conversion.
But, Alan says, why attract large volumes of traffic to your website if no-one is buying or doing what you wanted them to? This failure likely stems from a lack of awareness around conversion optimization and how to measure success.
Six Signs Your Business Should be Doing Conversion Optimization:
1) You have a high spend on attraction activities or advertising that drives consumers to your website.
2) You have a high spend on website content look and feel.
3) You have a large amount of online traffic.
4) There is pressure to increase profitability but you’re unsure how to measure it.
5) You’re frequently making website changes based on guesswork.
6) You’re operating in a highly competitive industry.
Warning, Scary Statistics Ahead!
Almost half of Australian online marketers surveyed spend over 40 percent of budget driving traffic to their sites. Their biggest increase in spend will be on website updates (55 percent).
Of annual budgets allocated to online marketing:
- 17% = creative and design
- 13.5% = content development and updates
- 13.2% = hosting, software and licenses
- 11.3% = usability
- 10.4% = programming and development
- 8.2% = SEO
- 7.1% = analysis and measurement
- 7.1% = conversion optimization
Despite ongoing investment in web site design and traffic generation, 90% of marketers surveyed spent less than 10 percent of their budget on persuading existing visitors to take action! (conversion optimization). You need to compliment traffic generation with a website that provides the right experience, leading visitors to the desired action, says Alan, otherwise your web site is as effective as a billboard in the desert.
Big Brands Make the Same Mistakes
It wasn’t just the small companies making the mistakes either. The study showed that large brands throw big bucks at getting traffic with conversion rates of less than 5 percent. They have large volumes of traffic, however, they continue to compete for more online traffic by investing in expensive advertising and marketing, despite low conversion rates of sales or customers – many less than 5 per cent.
By focusing on attracting more customers to your website you are competing against your peers who often use similar tactics (e.g. display, pay-per click and search engine optimization). Instead of competing with others for traffic and squandering the traffic you get, you should be competing against yourself by optimizing your site for more conversions. This is a competition you’re guaranteed to win. How much better could you be doing? Why does one change work but another doesn’t? How much impact could it have on traffic and conversions if you tweak your landing pages or checkout process?
Lack of Understanding About Conversion Optimization
There is a significant lack of understanding of conversion optimization in Australia – 89 percent do not do ANY. Most of these companies don’t have the tools or knowledge to accurately measure it, let alone act on it. Meanwhile, 62 percent of those surveyed have never even heard of conversion optimization or don’t understand what it is.
Research found that 30 percent of Australian marketers either do not evaluate the success of their website or only evaluate it on an annual basis, while 26 percent don’t know what factor/s contribute most to the success of their websites. Almost 45 percent of marketers surveyed that DO evaluate the success of their websites believe total visits/unique visitors or page views per visit are the key indicators of success. Wow.
Of those marketers that know about and conduct conversion optimization, over half have a website conversion rate of over 11 percent – double the figure claimed by respondents who have never heard of it. Marketers who are using conversion optimization are gaining competitive advantage by maximizing the engagement and sales opportunities of their sites. They understand what impacts the performance of their web site and what needs to change in order to increase sales and/or participation.
Getting started with Conversion Optimization
Conversion optimization doesn’t require significant budget or a fresh online marketing strategy to be effective. The critical factors are using web expertise to research and identify what online clients want and taking the necessary steps to build engagement, says Alan. Here are 8 ways to get started:
1. Know what your customers want.
2. Present an appropriate call to action.
3. Design your layouts & forms with users in mind.
4. Test your processes.
5. Use reviews, ratings and endorsements.
6. Use promotions and find synergies.
7. Improve navigation search and filtering functionality.
8. Increase credibility.